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FAO Cereal Supply and Demand Brief

The Cereal Supply and Demand Brief provides an up-to-date perspective of the world cereal market. The monthly brief is supplemented by a detailed assessment of cereal production as well as supply and demand conditions by country/region in the quarterly Crop Prospects and Food Situation. More in-depth analyses of world markets for cereals, as well as other major food commodities, are published biannually in Food Outlook.

Monthly release dates for 2019: 7 February, 7 March, 4 April, 9 May, 6 June, 4 July, 5 September, 3 October, 7 November, 5 December.

World cereal production to increase in 2019, but stocks to still decline slightly in 2019/20

Release date: 09/05/2019

Early prospects point to a likely rebound of 2.7 percent in global cereal production in 2019, following a decline registered in 2018. Based on the conditions of crops already in the ground and on planting intentions for those still to be sown, and assuming normal weather for the remainder of the season, world cereal output is forecast to reach a new record level of 2 722 million tonnes (including rice in milled equivalent), that is 71 million tonnes higher than in 2018. Among the major cereals, wheat, maize and barley would account for most of the rise in cereal production, with projected year-on-year increases of 2.5 percent, 2.2 percent and 6.1 percent, respectively. Global rice production is likely to remain close to the 2018 all-time high.

World cereal utilization is set to increase by 1.5 percent in 2019/20, and reach a high of 2 722 million tonnes, matching the forecast production. The expansion would be most pronounced for coarse grains, with their utilization expected to be up 1.3 percent from 2018/19, largely driven by strong demand for animal feed and industrial applications. Global food consumption of cereals is also expected to increase, by at least 1.1 percent, due to the continued rise in world population. Food consumption of rice and wheat, the two leading staples, is projected to increase by 1.7 percent and 1.0 percent, respectively.

Based on FAO’s first forecasts for cereal production in 2019 and total utilization in 2019/20, world cereal stocks would need to be drawn down marginally, by 0.7 percent, to 847 million tonnes, the lowest volume since 2016/17. Lower coarse grains and, to a lesser extent, rice inventories would account for most of the anticipated contraction in world cereal reserves. By contrast, wheat stocks are set to increase, to their second highest level on record. However, the decline in cereal stocks would only result in a small drop in the global cereal stock-to-use ratio, to a four-year low of 30.1 percent.

World trade in cereals in 2019/20 is forecast at close to 413 million tonnes, up just 0.5 percent (2.0 million tonnes) from the estimate for 2018/19, but still 1.9 percent (8 million tonnes) below the 2017/18 high. Most of the anticipated decline is associated with a likely drop in maize trade; whereas trade prospects for most of the other cereals are positive, especially for wheat and rice. Against a backdrop of overall comfortable supply and demand balances for nearly all the cereals, their international prices are likely to remain under pressure, at least through the first half of the 2019/20 season.

For more detailed analysis, see the May issue of Food Outlook

Summary Tables

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1/  Production data refer to the calendar year of the first year shown. Rice production is expressed in milled terms.
2/  Production plus opening stocks.
3/  Trade data refer to exports based on a July/June marketing season for wheat and coarse grains and on a January/December marketing season for rice (second year shown).
4/  May not equal the difference between supply and utilization due to differences in individual country marketing years.
5/ Major wheat exporters are Argentina, Australia, Canada, the EU, Kazakhstan, Russian Federation, Ukraine and the United States; major coarse grain exporters are Argentina, Australia, Brazil, Canada, the EU, Russian Federation, Ukraine and the United States; major rice exporters are India, Pakistan, Thailand, the United States, and Viet Nam. Disappearance is defined as domestic utilization plus exports for any given season.